How Can I Get the Credit Union to Lower Our Payments?

“Dear Steve,

My husband is the only bread winner in a family. We are both older and we have 3 young teenagers. I am 54 and he is 59. Our son is a junior in High school and our twin girls are 14 and still in middle school.

We have about 22 thousand in credit card dead with credit union and about 20 thousand with 2 different credit cards.

I have made in the past several attempts by calling credit union to lower our interest rate from 8.9 to 6.9 I have always strugguled and somehow paid my bills but I cannot any longer due to my health problems and other issues.

Please advice how to deal with the credit union since this is my biggest headache. I do not want bunckrupcy, dead consolidation and I simply would like to settle with them if possible.

Krystyna”

Dear Krystyna,

I’m sorry to hear about your health problems. It creates a trying time for sure.

Frankly, limiting your options is not the best way to approach this. All you are doing is boxing yourself into a corner and all but eliminating your chance of dealing with this situation.

What we know for sure is your expenses may increase as your health problem and other issues continue. That is going to put more pressure on your household budget and make it more difficult to deal with the situation.

It does not sound like you have cash on hand to settle the debt right now and if you are not three or so months delinquent on the debt the chances are you are not going to get to good settlement offers.

Dealing with credit unions makes this tricky since they have this little known trap called cross-collateralization. That means if you have a car loan with them or some other debt, a default on one debt is essentially a default on all debts and your collateral will be held until the situation is rectified.